Change and Growth in Managed Care

Abstract

Prologue: One of the most rapidly growing segments of the managed health care market is the insurer-owned managed care plan. Although health maintenance organizations (HMOs) and other managed care plans have existed for decades, their association with commercial insurers has shifted from being direct competitors to being one of several lines of insurers business. Many insurers have staked the future of their business on managed care; new data from the Health Insurance Association of America (HIAA) show that from 1982 to 1990, managed care grew from less than 1 percent to more than 25 percent of all HÍAA member business. These data come from the HIAA Managed Care Survey, a biannual survey of all HIAA-member insurance companies. Here, Elizabeth Hoy, Rick Curtis, and Tom Rice examine and analyze these data and their implications for the future of managed care. According to their analysis, nearly half of these insurers now offer some sort of managed care product. This portion of their business is growing, as their conventional insurance market is shrinking (although, the authors state, conventional insurance is still the norm). It seems obvious that insurers will continue to develop and refine their managed care products, in response to employers' demand for them. Hoy, who received her master of health administration degree from the University of Washington, Seattle, is a senior policy analyst in HIAAs Department of Policy Development and Research, Curtis, who came to HIAA three years ago after founding the National Academy for State Health Policy, is director of that department. He received a master's degree in public policy from the University of Michigan, Rice, who is an associate professor at the School of Public Health, University of California, Los Angeles, received a doctoral degree in economics from the University of California, Berkeley.